He thinks that introducing a 30 per cent tax relief rate for pension contributions - replacing the current system of tax relief at the income tax rates of 20, 40 and 45 per cent - would eliminate the need for a lifetime allowance by reducing the cost to the Exchequer of the nation's wealthiest saving into their retirement funds.

The change would hand those in the basic rate tax bracket a more generous tax incentive to save into a pension, while cutting that of higher-rate payers.

The pensions minister has been praised by David Smith, of Bestinvest, for taking a stand against his own party's politics.

He said: 'It is a position that puts him at odds with his own party, as Liberal Democrat policy is to aggressively cut the allowance from £1.25m to £1m.

'We therefore hope Mr. Webb will use his influence while a minister in the remaining year of the Coalition government to ensure that the abolition of the lifetime allowance makes its way into the next Autumn Statement.

'Unlike many other allowances, which are periodically increased to at least adjust for inflation, the lifetime pensions allowance has gone aggressively into reverse gear in recent years.

'The cap was first introduced in 2006 by Gordon Brown at £1.5million and was adjusted upwards each year until reaching a peak of £1.8million in 2010/11.

'However on the Coalition’s watch it was slashed to £1.5million in 2012/13 and yet again to £1.25million.

'While these will undoubtedly seem huge amounts to most people, the reality is that prevailing annuity rates and squeezed yields across many asset classes mean such sums will not secure a lavish income in retirement.'

The introduction of a 30 per cent tax relief on pension contributions would reduce the attraction of pension savings to the UK's wealthier workers, but basic rate taxpayers would effectively enjoy a pay rise when contributing to their workplace schemes.

Bestinvest said the impact on higher earners could be offset through salary or bonus sacrifice.